Telecom sector: Ministry takes up WHT issue with Finance Division, FBR


ISLAMABAD: The Ministry of Information Technology and Telecommunication has taken up the issue of withholding tax on the telecom sector with the Finance Division and the Federal Board of Revenue (FBR), said Syed Aminul Haque, Federal Minister for Information Technology (IT) and Telecommunication .

“We (IT Ministry) stands with telecom industry with respect to all-outstanding issues including WHT and hope to resolve the matters at the earliest,” said Haque while addressing at the launching ceremony of “GSMA Smartphone for All” organized by Global System for Mobile Communications Association (GSMA) & Kistpay in collaboration with Ministry of Information Technology (IT) and Telecommunication, here on Wednesday. He said that the next round of talks on these issues would be held next week.

The GSMA Smartphone 4 All initiative launched to facilitate affordable smartphone ownership for low-and middle-income consumers

Haque said, “today, the Ministry of IT and Telecommunication took another concrete step towards achieving the vision of Digital Pakistan. With our ‘Smartphone for All’ initiative, we aim to improve the buying ability of marginalized people via installment-based financing instruments and seek to encourage the digital inclusion of youth, women, and rural communities through early smartphone adoption.

He said further improved access to smartphones is a key priority so that everyone in Pakistan can participate in the digital economy and the socio-economic benefit from increased smartphone penetration can be achieved.

Telecom sector seeks critically-needed fiscal space

The minister said that Google finally decided to open its office in Pakistan and has been registered in SECP. A Google delegation will visit Pakistan on the 2nd week of December this year, while TikTok also planned to open office in Pakistan and Facebook authorities are in contact for the same.

Under the initiative, Kistpay enables Shariah Compliant Smartphone Financing on leading smartphone brands with plans ranging from three to 12 months with the fastest application approval process. Customers can avail the financing facility via the retail network, telco partners, Kistpay website and through the Kistpay WhatsApp channel. Smartphones will be available through Kistpay in the price range of Rs10,000 to Rs100,000.

Julian Gorman, Head of Asia-Pacific (APAC), GSMA, said, “A connected population is the basic ingredient for a Digital Nation from which flows digital economic growth, empowered industry and entrepreneurs and improved livelihoods for every citizen.

We must embrace the imperative to get every person enabled with a smartphone and applaud the Ministry of IT and Telecommunication and Kistpay for the bold commitment to smartphones for all Pakistan.”

Major General Amir Azeem Bajwa (retired), Chairman, Pakistan Telecommunication Authority (PTA) admitted that the telecom sector of Pakistan is the highest-taxed sector in the region while it has lowest ARPU of less than one dollar. However, the quarters concerned are of mindful of the situation, he added.

He commended the efforts of Kistpay and the GSMA to bridge the smartphone affordability gap as it is a key barrier to the adoption of the mobile internet. He further said that improved access to smartphones will increase access to information which will create micro-entrepreneurs and reduce poverty.

“To facilitate the transition to mobile broadband for an additional 50 million people in the next three years, Asif Aziz, CCO Jazz suggested that the government needs to discontinue the import and local production of 2G phones, prioritize local assembly of 4G-enabled smartphones, develop and implement a regulatory cover that enables telecom companies to offer smartphones on installments, and reduce withholding tax on essential telecom services from 15 percent to eight percent. This will help boost digital adoption and unlock tremendous socio-economic opportunities for the masses.

Syed Asif Jafri, CEO of Kistpay highlighted the challenges being faced by majority of Pakistanis in gaining access to both smartphones and Shariah Compliant Financing. Asif Jafri added, “Kistpay will enable many millions of disconnected users for digital and financial inclusion so that they can enjoy the benefits of a digitally connected life.”

Leading smartphone brands and startups companies such as Nokia, Xiaomi, Sehat Kahani, JazzCash, Chickoo, to name a few participated in the technology exhibition and showcased their products and services, which were all aimed at creating a digitally connected Pakistan. Participants of the event expressed great interest in these products and services, and it paved the way for future partnerships. The exhibition was followed by panel discussions on enabling handset affordability with leading industry experts including Irfan Wahab Khan, CEO of Telenor, Hatem Bamatraf, President and CEO of PTCL Group, Jeanette Whyte, Head of Public Policy, APAC, GSMA, Asif Aziz, Chief Commercial Officer (CCO) of Jazz and Asadullah Khan Niazi, Chief of Monitoring and Strategy, Universal Service Fund (USF) discussed the challenges, opportunities and responsibilities of different sectors of the economy and suggested the way forward to increase smartphone affordability, digital connectivity and upscaling e-commerce in Pakistan.

Copyright Business Recorder, 2022

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